17/08/2008

Indonesia's Pertamina took only Seria Light for 600,000bbl in its September arrival sweet crude buy tender. The winner of the tender was Kipco that supplied the crude at a premium of $2.50-2.50/bbl to OSP on CFR Indonesia. As for the factor for the extremely limited purchasing volume, Pertamina tried to reduce imports and preferred to refine domestically produced crude oil under the government policy, in view of the markedly high domestic crude oil inventories reflecting the impact of Product Sharing Contract (PSC). Furthermore, Indonesian 125,000 barrels per day (b/d) Balongan refinery will enter turnaround in October. In the refinery, Minas and Duri were processed (50% each). As a result, the both grades that were stored at Balongan refinery would be transferred to other refineries including 260,000b/d Balikpapan refinery ahead of turnaround. At Balikpapan refinery, imported crude oil accounts for about 70~80 percent of its total refining.
Indonesia's state-owned BPMigas on Wednesday issued semi-term tenders for Arun condensate and Geragai condensate. In the tender, BPMigas offered 275,000bbl per month of Arun Condensate for August, October and December laoding, while it will sell 400,000bbl of Geragai condensate for August and 300,000bbl per month of the condensate for November and December loading. The tender for Arun condensate will close on July 21 and that for Geragai condensate will close on July 22.
The output of Arun condensate was currently at around 10,000b/d. U.S. Exxon Mobil, a equity holder, brings some Arun condensate to its refinery in Singapore. Elsewhere, BPMigas sells a small amount each month to GS Caltex as a part of the term contract. Meanwhile, production of Geragai condensate was also about 10,000b/d. In addition to BPMigas, Chinaoil in China has a stake.
In the trade of September-lifting Australian Enfield, Mitsui and Australian Woodside jointly sold one cargo in the spot market. The cargo was purchased by a European major at a Minas ICP based price. The cargo fetched a hair under a premium of $3.00/bbl to ICP. Australian medium/heavy grades attracted a slew of inquiries from majors and oil refiners in North Asia. So the price levels were more than $1.00/bbl higher than the previous month's deals.
In the trade of Australian Sty Barrow for September-loading, an oil firm in Australia placed one cargo. The details were unknown as the company declined to disclose them, but the cargo was heard done at a premium of about $4.00/bbl to Dated Brent. One trader said that the price would be equivalent to a premium of $1.60/bbl to Minas ICP.
As for the market for September-lifting NWSC, a producer with a spot cargo for September-loading showed selling interest at a discount of $1.00 to APPI NWSC or slightly below the level. The crack spread for naphtha was still in deeply minus territory, so South Korean oil refiners and majors, main buyers for the condensate, were still wavering to buy the condensate at high prices. Their buying ideas were seen at a discount of $3.00/bbl to APPI NWSC or slightly lower. The spread between TPPI Tapis and APPI NWSC was still wide above $10.00/bbl (NWSC is lower). However, "It is hard to believe that the APPI Tapis/APPI NWSC spread would stay wide in September as it is now, so the factor could not underpin the September market," said one player.
European Mercuria on Thursday afternoon bid for August Minas for 100,000bbl at a premium of $2.80/bbl to September ICE Brent. The company continued to bid for Sept Minas. It bid for September Minas for 100,000bl at a premium of $2.80/bbl to September ICE Brent. The both bids were made through broker GFI・Spectron.

18/07/2008

--ASIA-PACIFIC CRUDE
As for the market for September-lifting condensate, talks emerged after RIM finished the day's price assessments. U.S. Chevron offered one 600,000~650,000bbl NWSC cargo at a discount of $2.50/bbl to APPI NWSC.
In the trade of September-lifting Malaysian grades, market sentiment for each grade turned slightly bullish. Like the previous month, spot supplies were tight, and moreover, end-users in Asia tended to prefer to purchase "short-hauled" regional grades, benefiting from freight rates. As for Kikeh, some players showed buying interest for Kikeh way above a premium of $3.50/bbl to APPI Tapis.
Regarding September-lifting Kikeh, European Glencore and European Trafigura each had one 600,000bbl cargo. It was seen that those traders were considering reselling those avails to two oil refiners in India. The two traders previously purchased the two cargoes from a U.S. oil firm. Of these, it seemed that Glencore takes the Kikeh under the term contract with the U.S. oil firm. Meanwhile, Petronas placed all of its two cargoes for September. The Malaysian oil firm placed one 600,000bbl cargo under the term deal with Pertamina and the remaining one cargo to a major. The deal to the major was traded at a floating basis price. Several end-users and traders had showed buying interest to Petronas. Petronas at one stage had offered the Kikeh at a premium above $4.00/bbl to APPI Tapis, but it eventually placed the crude to the above mentioned major.
Meanwhile, as for September-lifting Tapis, Petronas gave priority to supplying Tapis to its own refining systems, therefore, there would be no spot avails to be offered in the market. Petronas already supplied two cargoes of Labuan to Indian state-owned Indian Oil Corp (IOC) via the Indian oil firm's tenders. Elsewhere, their positions for Miri, Bintulu crude and Dulang were not finalized, but those avails could be offered in tenders issued by IOC and India's Bharat Petroleum Corp (BPCL). Both tenders will close early next week and no offers were seen from the Malaysian firm at this stage.
Regarding the market for September-lifting Bach Ho, a few traders with spot avails continued to show bullish sales stance. Several end-users such as majors were currently checking positions with sellers. One trader said the above mentioned Malaysian grades strengthened and Australian medium/heavy grades like Sty Barrow and Enfield fetched much higher premiums than the previous month, which would provide a tail wind for Bach Ho and the crude would lure animated buying. The sources added that a steep recovery in fuel oil prices in Singapore was also cited as a positive factor for Vietnamese grades like Bach Ho. The trader said it was poised to set an offer for Bach Ho at a premium of around $1.00/bbl to OSP.
Meanwhile, Vietnam's state-owned Petechim on Thursday issued a tender to sell August-lifting Bach Ho. If offered Bach Ho for 400,000~450,000bbl for August 15-30 loading in the tender. The tender will close on July 21.
In the trade of Australian medium/heavy grades for September, Australia's Woodside on Thursday sold an additional cargo each for Sty Barrow and Enfield. The details were unclear as the company declined to disclose the details. However, many end-users showed buying interest, therefore, it seemed to be certain that the prices were way above the previous month's prices. The Enfield was done way above a premium of $5.00/bbl to Dated Brent. Regarding the Sty Barrow, one market source says, "the Sty Barrow price could have risen to the level of $1.00~1.50/bbl lower than the Enfield price." Following the deals, one cargo each for Enfield and Sty Barrow was still on offer in the market.
As for the market for Minas, European Mercuria on Friday noon bid for August Minas for 100,000bbl at a premium of $2.80/bbl to September ICE Brent. The company also bid for September Minas for 100,000bbl at a premium of $2.80/bbl to September ICE Brent. Both bids were made through broker GFI・Spectron.

Vietnam's state-owned Petechim kicked off term talks for Bach Ho in the October to March 2009 period. Petechim requested its term buyers to submit their initial bids by July 14. From now on, Petechim will have individual talks with its term buyers where both sides would discuss the term prices and the demand/supply situations. The term talks were expected to be wrapped up by the middle of August. The term price for Bach Ho for the April-September period was set at a premium of $6.53/bbl to Minas quotes. Petechim sold 150,000~160,000b/d of Bach Ho to its term buyers of around 20 companies. As the large-lot end-users, Royal Dutch Shell, the U.S. Chevron, Chinaoil in China and Petro Summit were cited.
For other trade for Vietnamese grades, new crude production would commerce in September. The name of the new crude is Su Tu Vang. The Su Tu Vang oil field is located near Su Tu Den producing are and the crude grade appeared to be similar to Su Tu Den. The production would be around 50,000barrels per day at maximum. PetroVietnam has a 50% stake in the Su Tu Vang oil field, and the remaining stakes are owned by U.S. Conoco Philipps, South Korean state-owned Korean National Oil Co (KNOC) and South Korean SK Energy.
As for other new Vietnamese crude, production for Phuong Dong and Ca Ngu Vang was also expected to start in 2008. Phuong Dong would be heard mixed with Rang Dong and will be marketed as Rang Dong while Ca Ngu Vang will be blended with Bach Ho whose oil field is located nearby and will be sold as Bach Ho, according to a trader in Singapore. As for Phuong Dong, PetroVietnam has a 64.5% interest and Nippon Oil has a remaining 35.5% stake.
In the trade of August-lifting Minas, European Mercuria on Wednesday afternoon bid for Minas for 100,000bbl at a premium of $2.80/bbl to August ICE Brent. The company also continued to bid for September Minas. The bid was placed at a premium of $2.50/bbl to September ICE Brent for September Minas for 100,000bbl. Both bids were made through broker GFI・Spectron.
As for the above mentioned August-lifting Minas, there were no players making firm offers. As for August-lifting Minas, in addition to U.S. Chevron, European Vitol and Itochu also placed partial cargoes previously in the spot market. Players with term contracts with Chevron, such as Nippon Oil and Mitsubishi, could have already placed their term avails to buyers like Tokyo Electric Power (TEPCO), so that they were unlikely to release their term avails in the spot market. Under the circumstances, securing spot avails for August Minas would be seen as increasingly difficult.

23/07/2008:

Last weekend, PetroVietnam Trading Co, or Petechim, quoted the first offer in talks on term contracts for Vietnamese Bach Ho, which would be valid from Oct, 2008, through Mar, 2009. The offer was at a premium of $9.05/bbl to the Minas quotations, $2.52/bbl higher than the ongoing levels and $2.60-2.80/bbl higher than the first bids it received from existent contractors. Petechim's offer was extremely high, projecting a drawdown in supplies overseas of the grade following a planned start of the 130,000-140,000b/d Dan Quat refinery in January, 2009. Each contractor was to bid for the second time on Tuesday.
Sep-lifting NWSC was at discounts in the range of $2.90-3.00/bbl to the APPI NWSC quotations. To reflect languishing naphtha crack spreads in Singapore at around minus $5.00/bbl, condensate prices hovered slackly. While Chevron is offering Sept NWSC at a discount of $2.50/bbl to APPI NWSC for Sep-loading, it seemed to take time for any buying interest to surface.
Chinese Petroleum Corp in Taiwan issued buy tender for September arrival condensate today, closing on 23rd. They awarded Malampaya and Bayu Undan in their August condensate buy tender and Senipah condensate in the July Buy tender respectively.
Meantime, it was Trafigura that won a sell tender closed on Thursday by Indonesia's national company BPMIGAS for Aug- and Sep-lifting Duli and Beranak, which were to be packaged. The prices were at a premium of 2-3cts/bbl to the ICP quotations for the Duri and at a premium of 1-3cts/bbl to the Beranak ICP quotations for the Beranak.
In the trade of Sep-lifting other Asia Pacific light grades, Glencore sold through spot trade to a major 600,000bbl in Malaysian Kikeh. While the company declined to comment on the reported deal, it seemed wrapped-up on CFR. AS for the projected level on FOB, most saw it to have been at a premium of around $4.00/bbl to the APPI Tapis quotations. It was then just Trafigura to leave available Sep-lifting Kikeh at 600,000bbl. In the trade of other Malaysian grades, Petronas pegged an offer for a partial Bintulu crude cargo at a premium of $3.50/bbl to the APPI Tapis quotations and pushed ahead with talks with prospective buyers. Meantime, a Japanese trading house sold a spot cargo of 600,000bnbl in Cossack.
In the trade of Minas, Mercuria in Europe bid for Sep-lifting 100,000bbl at a premium of $2.80/bbl to the Sep ICE Brent as of Tuesday noon. The quote came through GFI Spectron, a broker.

As for trade for September-lifting regional condensate, Bayu Undan was traded. One South Korean oil refiner and a major each purchased one cargo, according to a few market players.
The both oil firms declined to make a comment, but the cargoes were heard done at a discount of more than $3.50/bbl to APPI NWSC. Overall sentiment for September-lifting condensate languished, given the crack spread for naphtha in Singapore slipping to close to minus $6.00/bbl and the alternative NWSC offers slashing to a discount of close to
$3.00/bbl to APPI NWSC. Under the circumstances, Taiwan's CPC Corp on Tuesday issued a tender to sell September-lifting condensate. The tender will close on Wednesday.
Indonesia's state-owned BPMigas awarded its Arun Condensate term tender for August-December loading, closing on July 21, to South Korea's GS Caltex. The company took 275,000bbl of the condensate per month in August, October and December. The awarded
price was at a premium of 75-80cts/bbl to ICP.
BPMigas at the same time awarded its Geragai condensate tender, conducted simultaneously as the Arun condensate tender, for August, November and December to trader Kernel. The awarded price was at a premium of 45-50cts/bbl to Geragai ICP. The Geraggai ICP was at
a discount of 26cts/bbl to BRC. BPMigas offered Geragai condensate for 400,00bbl for August loading and 300,000bbl each for October and December.
Malaysia's state-owned Petronas on Tuesday issued a tender to sell the country's Cakerawara condensate for September-loading. The company in the tender offered the condensate for 300,000~400,000bbl. The tender will close on July 24. Petronas had skipped a tender to sell the condensate over the past few months since it preferred to take it
back to its own refining systems. Meanwhile, it seemed that Petronas heard decided to take back its September cargo for Terengganu condensate to its own refining system.
As for the market for September-lifting Cossack, spot cargoes were all sold out.
Mitsubishi placed one uncommitted cargo while British BP opted to bring its cargo into
its own refining systems. Mitsubishi declined a comment on the Cossack deal, but there
were talks that the Cossack was traded at a price to a benchmark other than APPI Tapis,
as September APPI Tapis was perceived as expensive.
For other September-lifting light sweet grades, a producer in Papua New Guinea placed
an additional cargo for Kutubu. The Kutubu was done a tad above a premium of $2.00/bbl
to APPI Tapis, one trader said. Meanwhile, Petronas was proceeding marketing for Penara
and Abu. The offer for Penara was done at a discount of about $1.80/bbl to APPI Tapis
while the offer for the Abu was heard at a discount of more than $3.00/bbl to APPI Tapis.
In the trade of September-lifting Australian Sty Barrow, Australian BHP sold one cargo,
in addition to two cargoes sold by Australian Woodside as reported. The buyer of the
BHP was seen as a major that heard swapped it with another crude grade.
Petechim in Vietnam awarded its September-lifting Ruby sell tender to U.S. Chevron for
200,000~400,000bbl for September 1-15 loading. The cargo was believed to have been done
a shade below a premium of $6.00/bbl to Minas quotes. Meanwhile, the award details for
Petechim's August-loading Bach Ho sell tender were not clear as of 17:00 Tokyo time.
In the trade of Minas, trader Mercuria bid for September-lifting 100,000bbl at a premium
of $2.90/bbl to September ICE Brent on Wednesday afternoon. The bid was made through
broker GFI・Spectron. The bid was up 10cts/bbl from the previous day.

September-lifting Duri surged, with premiums to ICP widening sharply to $4.70-4.80/bbl. Spot cargoes already diminished after majors and oil refiners in Asia snapped up spot cargoes on perceptions that Duri's values were attractive, compared with other medium/heavy grades. The crack spread for high sulfur fuel oil in Singapore bounced back sharply and this also provided support to Duri, albeit indirectly. U.S. Conoco Philipps and U.S. Chevron heard placed their spot cargoes at a premium of around $4.50/bbl to ICP or a premium close to $5.00/bbl to ICP. A few market sources said that trader Kernel also sold Duri and Belanak in a package to an oil refiner in South East Asia. Kernel previously took Duri for 200,000bbl per month and Belanak for 300,000bbl per month in BPMIgas's August-September Duri/Belanak packaged tender.
In the trade of Minas, European Mercuria on Thursday noon bid for September-loading 100,000bbl at a premium of $3.00/bbl to September ICE Brent. The bid was made through broker GFI・Specton.
Spot cargoes for September Enfield were all sold out. Mitsui placed one 550,000bbl cargo for second-half loading, completing all sales of spot cargoes for September. Mitsui declined to unveil the details but the cargo heard changed hands above a premium of $5.00/bbl to Dated Brent, similar to the previous Enfield deal sold by Woodside.
Vietnam's Petechim awarded its August-lifting Bach Ho sell tender to a major for 400,000~450,000bbl for August 15-31 loading. The cargo was awarded at a premium of $7.13/bbl to Minas quotes, or equivalent of a premium of 60cts/bbl to OSP. The current OSP was at a premium of $6.53/bbl to Minas quotes. The cargo for August-loading was too prompt, so tender participants were limited to majors. However, end-users led by majors actively showed interest for short-hauled regional grades as well as September Bach Ho, so the market for Bach Ho remained firm.
Meanwhile, in a tender for September Ruby mentioned in RIM report on Wednesday, it revealed that the price taken by Chevron was heard done at a premium of $5.85-5.90/bbl to Minas quotes.

September-lifting NWSC extended slide to a discount of $3.30-3.40/bbl to APPI NWSC. The bleak crack spread for naphtha showed no signs of turning around, prompting sellers with spot avails to cut offers. U.S. Chevron on Thursday afternoon reduced an offer for 600,000~650,000bbl to a discount of $3.25/bbl to APPI NWSC. Australian oil firm's one cargo was said to have been placed, but no other movements detected.
In a buy tender for September-lifting condensate issued by Taiwan's CPC Corp, several regional grades like NWSC, Laminaria, Malampaya and Bayu Undan, along with Middle Eastern condensate, were offered. For NWSC, suppliers like the above mentioned Chevron offered their cargoes way below a discount of $3.00/bbl to APPI NWSC. Laminaria was heard offered at a discounted level to Dubai based prices. The September Tapis/Dubai spread elongated to about $9.60/bbl, so the offer for the Laminaria was seen calculated at least at a discount of more than $10.00/bbl to APPI Tapis. The Bayu Undan was heard offered at a discount of around $4.00/bbl to APPI NWSC. CPC is expected to award its tender later Thursday.